A lack of inventory continues to be the primary driving force of the US housing market.

But in Manhattan’s luxury submarket, an overabundance of supply is causing prices to fall to their lowest levels in over three years, according to a report released today by the listing site StreetEasy.

The average price of a Manhattan luxury home fell 2 percent annually to $4.3 million in October, the lowest level on record since April 2014. And even though prices were down, luxury homes were on the market an average of 157 days, 15 days longer than last year.

StreetEasy defines the “luxury” submarket refers to homes priced in the top 20th percentile, generally above $4 million in Manhattan.

Over the last year, luxury home prices also declined 3.6 percent to $1.6 million in Brooklyn but rose 6.9 percent to $1 million in Queens, says StreetEasy.

Supply has been the chief cause of the falling prices seen throughout the city’s luxury submarket.

“The onslaught of high-end development in Manhattan and Brooklyn shows no signs of slowing down,” says StreetEasy Senior Economist Grant Long in the report.

And with more inventory coming on the market, this trend is likely to last a bit longer.

“The luxury market in 2018 will continue to favor the buyer, who will likely encounter increasingly anxious sellers willing to slash prices as more new construction hits the market,” says Long.

Although that may not be good news for sellers, homebuyers can potentially negotiate a price below asking and with greater incentives from the seller.

Meantime, average rents remained flat in Manhattan overall in October at $3,164 compared to last year, but dropped a whopping 25 percent to $5,995 in the pricey Tribeca neighborhood.

Rents in Queens remained mostly unchanged from last year at $2,114, while Brooklyn rents grew 0.7 percent to $2,550.

The share of Manhattan rentals that were discounted reached 28 percent in October, up 3.4 percent from last year. October’s level was the highest reading on record, according to StreetEasy’s data.

At the same time, the share of rentals that were discounted also reached a new all-time high in Queens, where 25 percent of listings were discounted. This was up nearly 6 percent from last year.

“While asking rents will stay high as the city creates more jobs, the continued influx of new development, particularly on the high-end, will likely keep future rent increases at bay and give prospective tenants some negotiating power,” Long tells BuzzBuzzNews.

And, over time, rents will have to fall to meet demand. But that doesn’t necessarily mean incentives will go away.

“Anyone looking to rent an apartment next year should be asking their prospective landlords for a month or even two months of free rent. And renters planning to renew leases in 2018 would be well advised to check comparable listings in the neighborhood for the pulse of the market and a sense of what they may be able to negotiate during renewal conversations,” Long tells BuzzBuzzNews.